Business and Finance.

tax withholding on Undergraduate and Graduate Student Wages/Salary

TAX WITHHOLDING ON undergraduate and graduate student WAGEs/salary

Wages paid to a student employee through the payroll system are subject to the following withholding taxes: Federal Income Tax, State Income Tax, and FICA (Social Security and Medicare). The withholding of federal and state taxes is dependent upon the student's biweekly gross income and how the student files their W-4 and A-4 forms. A student may seek advice from the Internal Revenue Service regarding how to file their W-4 Form by calling the IRS toll-free number at 1.800.829.1040. A student may seek advice from the Arizona Department of Revenue regarding how to file their A-4 Form by calling the toll-free number at 1.800.843.7196.

The number of credit hours a student is enrolled for at the end of the drop/add period determines whether or not FICA tax is withheld. To be exempt from FICA tax a student must be enrolled at least half time:

Spring or Fall Term

(Comprised of Session A and/or Session B and/or Session C)

Undergraduate
Graduate
Graduate Assistant*
6 or more hours
5 or more hours
3 or more hours

Summer Term

(Comprised of Session A and/or Session B and/or Session C)

Undergraduate
Graduate
Graduate Assistant*
2 or more hours
2 or more hours
1 or more hours

If break between classes is more than 5 weeks, FICA exemption does not apply.

    

* For enrollment verification purposes, graduate assistant is a generic term that includes graduate assistant, teaching assistant, research assistant, graduate associate, teaching associate and research associate.

F1 and J1 Status Nonresident Alien Students

The only exception to the above requirements is for nonresident alien students admitted to the United States in an F1 or J1 status. Student employees in this category remain exempt from FICA tax regardless of hours until they have passed the substantial presence test; i.e., been present in the United States during more than four calendar years.

 

To request a refund of FICA taxes withheld, submit an on-line case request to the Employee Service Center at Create A Case